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Andrew J. Patton and Allan Timmermann
Evaluation of forecast optimality in economics and finance has almost exclusively been conducted on the assumption of mean squared error loss under which forecasts should be unbiased and forecast errors serially uncorrel...Read more...
Michele Piccione and Ariel Rubinstein
We model differences among agents in their ability to recognise temporal patterns of prices. Using the concept of DeBruijin sequences in two dynamic models of markets, we demonstrate the existence of equilibria in which ...Read more...
Luca Anderlini and Leonardo Felli
This paper explores the link between boundedly rational behaviour and incomplete contracts. The bounded rationality of the agents in our world is embodied in a constraint that the contracts they write must be algorithmic...Read more...
Sonia R Bhalotra
This paper investigates the efficiency wage hypothesis and derives a tractable expression for the profit loss incurred by deviations from the efficiency wage. The extent of the wage deviation can be inferred from product...Read more...
We show that, in games of complete information, the Aumann-Brandenburger (1995) sufficient conditions for Nash equilibrium in beliefs also imply common knowledge of rationality. We then consider beliefs held in games of ...Read more...
This paper proposes an equilibrium concept for a class of games in which players make irreversible costly decisions; these games have been widely used in the recent I.O. literature. The equilibrium concept is defined, no...Read more...